The US private practice market continues to shift

The number of law firm mergers that have taken place in the US market is keeping pace with the record number recorded last year, according to figures from Altman Weil MergerLine which indicate that a total of 48 deals were announced in the first half of the year.

The majority of merger activity derives from smaller and medium sized firms, who are searching for ways to expand, or merely stay afloat, in the US’s ever more competitive legal market. The increasing pressure exerted on smaller firms by larger ones, particularly in legal hubs such as New York and Philadelphia, is noted as a major contributing factor in the uptick in M&A activity in recent years.

Last year there were a total of 91 mergers in the US, a number that could well be exceeded if the growing trend continues over the next six months. According to the data, 93% of the deals recorded in the second quarter of 2016 involved a firm with less than 25 lawyers, and over half of acquirers had 50 lawyers or less. The insight also indicated that firms focused on acquiring others in the same city or state to create broader foundations.

Conversely bigger deals involved firms which covered largely different geographical areas, with one of the most notable mergers being that of Kansas City based Husch Blackwell, which has 560 lawyers, and Milwaukee based Whyte Hirschboeck Dudek, which has 146 lawyers.

The increasingly competitive legal landscape in the US may leave some lawyers concerned about their potential career prospects, however the recent uptick in mergers is a strong indication of the resilience of smaller firms, and is undoubtedly testament to the overall strength of the market.